GSV Capital Corp. (GSVC) Reports Fourth Quarter and Fiscal Year 2016 Financial Results
Net Asset Value of $8.66 per Share as of December 31, 2016
WOODSIDE, Calif., March 16, 2017 (GLOBE NEWSWIRE) — GSV Capital Corp. (“GSV Capital” or the “Company”) (Nasdaq:GSVC) today announced financial results for the quarter and fiscal year ended December 31, 2016. Net assets totaled approximately $192.1 million, or $8.66 per share, at December 31, 2016, as compared to $10.08 per share at September 30, 2016 and $12.08 per share at December 31, 2015.
“While we are disappointed with the decline in NAV during the quarter, our long-term strategic focus on identifying and investing in the world’s most dynamic, venture-backed private companies remains unchanged,” said Michael Moe, Chief Executive Officer of GSV Capital. “We believe that Snap’s successful IPO is a strong positive signal for other top names in the GSV Capital portfolio and we are encouraged by recent developments in the broader growth economy.”
Investment Portfolio as of December 31, 2016
At December 31, 2016, GSV Capital held positions in 45 portfolio companies with an aggregate fair value of approximately $262.0 million. Excluding Treasuries, the Company’s top ten portfolio company investments accounted for 60.2% of the total portfolio at fair value.
| Top Ten Investments at December 31, 2016 | |||||
| $ in millions (rounded) | Fair Value |
% of Total Portfolio |
|||
| Palantir Technologies, Inc. | $ | 41.5 | 15.8 | % | |
| Spotify Technology S.A. | 18.9 | 7.2 | |||
| Coursera, Inc. | 14.5 | 5.5 | |||
| JAMF Holdings, Inc. | 13.9 | 5.3 | |||
| General Assembly Space, Inc. | 13.7 | 5.2 | |||
| Dropbox, Inc. | 13.2 | 5.0 | |||
| Lytro, Inc. | 10.9 | 4.2 | |||
| Ozy Media, Inc. | 10.6 | 4.0 | |||
| Course Hero, Inc. | 10.5 | 4.0 | |||
| Curious.com, Inc. | 10.0 | 3.8 | |||
| Total (rounded) | $ | 157.8 | 60.2 | % | |
Of the five key investment themes GSV Capital has identified in its portfolio as of December 31, 2016, Education Technology is its largest commitment, accounting for 36.8% of the total portfolio at fair value. Cloud Computing and Big Data represents 34.3% of the total portfolio at fair value, and Social Mobile, Marketplaces and Sustainability represent 17.5%, 9.8% and 1.6% of the total portfolio at fair value, respectively.
Fourth Quarter 2016 Portfolio Investment Activity
In the fourth quarter of 2016, GSV Capital invested $526,000 in NestGSV, Inc. and $250,000 in Beamreach Solar, Inc.
GSV Capital sold shares in the following portfolio companies during the fourth quarter of 2016:
| Average | |||||||||||||||||||||||
| Shares | Net Share | Net | Realized | ||||||||||||||||||||
| Portfolio Company | Sold | Price 1 | Proceeds | Loss 2 | |||||||||||||||||||
| Upwork Global Inc. | 25,159 | $ | 4.31 | $ | 108,531 | $ | (77,819 | ) | |||||||||||||||
| NestGSV, Inc. | N/A | N/A | $ | 500,000 | – | ||||||||||||||||||
__________
| (1) | The average net share price is the net share price realized after deducting all commissions and fees on the sale(s). |
| (2) | Realized loss excludes any realized gains/(losses) incurred on the maturity of GSV Capital’s treasury investments. |
As of December 31, 2016, GSV Capital had no borrowings outstanding under its credit facility, which matured in accordance with its terms on December 31, 2016.
| Fourth Quarter 2016 Financial Results | ||||||||||||
| Quarter Ended December 31, 2016 |
Quarter Ended December 31, 2015 |
|||||||||||
| $ in millions (rounded) |
per share |
$ in millions |
per share |
|||||||||
|
Net investment income/(loss) |
$ | 3.9 | $ | 0.17 | $ | (4.7 | ) | $ | (0.24 | ) | ||
| Net realized losses | $ | (0.3 | ) | $ | (0.01 | ) | $ | (0.0 | ) | $ | (0.00 | ) |
| Benefit for taxes on net realized losses | – | – | – | – | ||||||||
| Net change in unrealized depreciation of investments | $ | (36.6 | ) | $ | (1.65 | ) | $ | (13.5 | ) | $ | (0.69 | ) |
| Benefit for taxes on unrealized depreciation of investments | $ | 1.6 | $ | 0.07 | $ | 0.0 | $ | 0.00 | ||||
| Net decrease in net assets resulting from operations – basic | $ | (31.5 | ) | $ | (1.42 | ) | $ | (18.1 | ) | $ | (0.94 | ) |
Weighted-average common basic shares outstanding were approximately 22.2 million for the quarter ended December 31, 2016 and 19.4 million for the quarter ended December 31, 2015.
| Fiscal Year 2016 Financial Results | ||||||||||||
| Fiscal Year Ended December 31, 2016 |
Fiscal Year Ended December 31, 2015 |
|||||||||||
|
$ in millions |
per share |
$ in millions |
per share |
|||||||||
|
Net investment loss |
$ | (1.3 | ) | $ | (0.06 | ) | $ | (48.7 | ) | $ | (2.52 | ) |
| Net realized gains/(losses) | $ | (2.6 | ) | $ | (0.12 | ) | $ | 54.1 | $ | 2.80 | ||
| Benefit for taxes on net realized gains | – | – | $ | 0.3 | $ | 0.02 | ||||||
| Net change in unrealized depreciation of investments | $ | (73.2 | ) | $ | (3.30 | ) | $ | (13.4 | ) | $ | (0.69 | ) |
| Benefit for taxes on unrealized depreciation of investments | $ | 2.1 | $ | 0.10 | $ | 16.1 | $ | 0.83 | ||||
| Net increase/(decrease) in net assets resulting from operations – basic | $ | (75.0 | ) | $ | (3.38 | ) | $ | 8.5 | $ | 0.44 | ||
Weighted-average common basic shares outstanding were approximately 22.2 million for the fiscal year ended December 31, 2016 and 19.3 million for the fiscal year ended December 31, 2015.
GSV Capital’s liquid assets ended the quarter at $17.1 million, consisting of $8.3 million of cash and $8.7 million of public securities not subject to lock-up agreements, none of which are subject to periodic sales restrictions.
Conference Call and Webcast
Management will hold a conference call and webcast for investors today at 2:00 p.m. PT (5:00 p.m. ET). The conference call number for U.S. participants is 877-852-6543, and the conference call number for participants outside of the United States is 1-719-325-4839. The conference ID number for both call numbers is 8092483. Additionally, interested parties can listen to a live webcast of the call from the “Investor Relations” section of GSV Capital’s website at http://investors.gsvcap.com/. An archived replay of the webcast will also be available for 12 months following the live presentation.
A replay of the conference call may be accessed until 5:00 p.m. PT (8:00 p.m. ET) on March 23, 2017 by dialing 888-203-1112 (U.S.) or 1-719-457-0820 (international) and using conference ID number 8092483.
About GSV Capital Corp.
GSV Capital Corp. (GSVC) is a publicly traded investment fund that seeks to invest in high-growth, venture-backed private companies. Led by industry veteran Michael Moe, the Company seeks to create a portfolio of high-growth emerging private companies via a repeatable and disciplined investment approach, as well as to provide investors with access to such companies through its publicly traded common stock. GSV Capital is headquartered in Woodside, CA. www.gsvcap.com
Follow GSV Capital on Twitter: @gsvcap
The GSV Capital Corp. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=12750
Forward-Looking Statements
Statements included herein may constitute “forward-looking statements,” which relate to future events or our future performance or financial condition. These statements are not guarantees of our future performance, condition or results of operations and involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described from time to time in our filings with the SEC. GSV Capital Corp. undertakes no duty to update any forward-looking statements made herein, unless required to do so by law.
| GSV CAPITAL CORP. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES |
|||||||
| December 31, 2016 | December 31, 2015 | ||||||
| ASSETS | |||||||
| Investments at fair value: | |||||||
| Investments in controlled securities (cost of $22,893,441 and $21,830,392, respectively) (1) | $ | 19,037,566 | $ | 22,871,790 | |||
| Investments in affiliated securities (cost of $51,773,388 and $73,942,123, respectively) (1) | 42,444,690 | 66,075,585 | |||||
| Investments in non-controlled/non-affiliated securities (cost of $204,101,445 and $197,577,328, respectively) | 200,532,890 | 260,861,392 | |||||
| Investments in treasury bill (cost of $29,998,750 and $29,999,968, respectively) | 29,998,490 | 30,000,000 | |||||
| Investments owned and pledged (amortized cost of $0 and $3,675,192, respectively) (2) | – | 3,676,693 | |||||
| Total Investments (cost of $308,767,024 and $327,025,003, respectively) | 292,013,636 | 383,485,460 | |||||
| Cash | 8,332,634 | 13,349,877 | |||||
| Restricted cash | – | 52,931 | |||||
| Due from: | |||||||
| GSV Asset Management (1) | – | 220,770 | |||||
| Portfolio companies (1) | – | 56,371 | |||||
| Interest and dividends receivable | 92,946 | 97,183 | |||||
| Prepaid expenses and other assets | 213,942 | 227,826 | |||||
| Deferred financing costs | 311,268 | 352,653 | |||||
| Total Assets | 300,964,426 | 397,843,071 | |||||
| LIABILITIES | |||||||
| Due to: | |||||||
| GSV Asset Management (1) | 422,025 | 5,047,429 | |||||
| Accounts payable and accrued expenses | 335,611 | 105,587 | |||||
| Accrued incentive fees (1) | 2,126,444 | 17,314,565 | |||||
| Accrued management fees (1) | 524,054 | 683,423 | |||||
| Accrued interest payable | 1,056,563 | 1,056,563 | |||||
| Payable for securities purchased | 26,498,750 | 26,499,357 | |||||
| Deferred tax liability | 10,359,371 | 12,476,155 | |||||
| Convertible Senior Notes payable 5.25% due September 15, 2018 (2) | 67,512,798 | 66,649,047 | |||||
| Total Liabilities | 108,835,616 | 129,832,126 | |||||
| Commitments and contingencies (Notes 6 and 9) | |||||||
| Net Assets | $ | 192,128,810 | $ | 268,010,945 | |||
| NET ASSETS | |||||||
| Common stock, par value $0.01 per share | |||||||
| (100,000,000 authorized; 22,181,003 issued and outstanding, respectively) | $ | 221,810 | $ | 221,810 | |||
| Paid-in capital in excess of par | 221,237,636 | 237,757,527 | |||||
| Accumulated net investment loss | (1,443,996 | ) | (16,634,037 | ) | |||
| Accumulated net realized gains (losses) on investments | (773,882 | ) | 2,681,342 | ||||
| Accumulated net unrealized appreciation (depreciation) of investments | (27,112,758 | ) | 43,984,303 | ||||
| Net Assets | $ | 192,128,810 | $ | 268,010,945 | |||
| Net Asset Value Per Share | $ | 8.66 | $ | 12.08 | |||
| (1) | This balance is a related-party transaction. |
| (2) | The Convertible Senior Notes have a face value of $69,000,000. In accordance with the terms of the Company’s Convertible Senior Notes payable, the Company deposited $10,867,500 in an escrow account with U.S. Bank N.A., the trustee. These funds were used to purchase six U.S. Treasury Strips with an original cost of $10,845,236. As of December 31, 2016, all of the government securities purchased had matured and the proceeds were used by the trustee in accordance with the terms of the escrow agreement. |
| GSV CAPITAL CORP. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
||||||||||||
| Year ended | Year ended | Year ended | ||||||||||
| December 31, 2016 | December 31, 2015 | December 31, 2014 | ||||||||||
| INVESTMENT INCOME | ||||||||||||
| Interest income from controlled securities (1) | $ | 101,999 | $ | – | $ | 10,233 | ||||||
| Interest income from affiliated securities (1) | 159,016 | 214,420 | 130,021 | |||||||||
| Interest income from non-controlled/non-affiliated securities | 262,473 | 29,695 | 44,805 | |||||||||
| Dividend income from affiliated securities (1) | – | – | – | |||||||||
| Dividend income from non-controlled/non-affiliated securities | – | 46,781 | 887 | |||||||||
| Other income from non-controlled/non-affiliated securities | 212,795 | – | – | |||||||||
| Total Investment Income | 736,283 | 290,896 | 185,946 | |||||||||
| OPERATING EXPENSES | ||||||||||||
| Management fees (1) | 6,896,347 | 8,044,801 | 7,562,488 | |||||||||
| Incentive fees (1) | (15,188,121 | ) | 8,170,326 | 3,614,347 | ||||||||
| Costs incurred under Administration Agreement (1) | 2,545,316 | 2,681,079 | 3,199,904 | |||||||||
| Directors’ fees | 345,000 | 373,676 | 260,000 | |||||||||
| Professional fees | 1,966,906 | 1,357,988 | 1,764,722 | |||||||||
| Interest expense | 4,731,430 | 4,961,169 | 5,503,843 | |||||||||
| Income tax expense | – | 880,778 | – | |||||||||
| Other expenses | 702,768 | 509,418 | 668,635 | |||||||||
| Gain on fair value adjustment for embedded derivative | – | (1,000 | ) | (798,000 | ) | |||||||
| Total Operating Expenses | 1,999,646 | 26,978,235 | 21,775,939 | |||||||||
| (Provision)/Benefit for taxes on net investment loss (2) | – | (21,969,370 | ) | 8,810,102 | ||||||||
| Net Investment Loss | (1,263,363 | ) | (48,656,709 | ) | (12,779,891 | ) | ||||||
| Net Realized Gains/(Losses): | ||||||||||||
| From affiliated securities | – | (10,170,567 | ) | 10,419 | ||||||||
| From non-controlled/non-affiliated securities | (2,634,471 | ) | 64,314,796 | 23,915,705 | ||||||||
| Net Realized Gains/(Losses) on investments | (2,634,471 | ) | 54,144,229 | 23,926,124 | ||||||||
| (Provision)/Benefit for taxes on net realized | ||||||||||||
| gain on investments (2) | – | 342,802 | (9,769,036 | ) | ||||||||
| Net Change in Unrealized | ||||||||||||
| Depreciation of investments: | ||||||||||||
| From controlled securities | (4,897,273 | ) | (627,139 | ) | (662,619 | ) | ||||||
| From affiliated securities | (13,571,477 | ) | 1,386,378 | (6,867,225 | ) | |||||||
| From non-controlled/non-affiliated securities | (54,745,095 | ) | (14,181,484 | ) | 1,718,047 | |||||||
| Net Change in Unrealized | ||||||||||||
| Depreciation of investments | (73,213,845 | ) | (13,422,245 | ) | (5,811,797 | ) | ||||||
| Benefit for taxes on unrealized | ||||||||||||
| depreciation of investments (2) | 2,116,784 | 16,058,080 | 2,371,829 | |||||||||
| Net Increase/(Decrease) in Net Assets | ||||||||||||
| Resulting from Operations | $ | (74,994,895 | ) | $ | 8,466,157 | $ | (2,062,771 | ) | ||||
| Net Increase/(Decrease) in Net Assets Resulting | ||||||||||||
| from Operations per Common Share | ||||||||||||
| Basic | $ | (3.38 | ) | $ | 0.44 | $ | (0.11 | ) | ||||
| Diluted (3) | $ | (3.38 | ) | $ | 0.44 | $ | (0.11 | ) | ||||
| Weighted-Average Common Shares Outstanding | ||||||||||||
| Basic | 22,181,003 | 19,327,938 | 19,320,100 | |||||||||
| Diluted (3) | 22,181,003 | 19,327,938 | 19,320,100 | |||||||||
| (1) | This balance is a related-party transaction. |
| (2) | Due to the Company’s change in tax status to a regulated investment company (“RIC”) from a C Corporation, the associated accrued benefits and provisions from previous years were reversed, resulting in a provision for net investment loss, a benefit for net realized gains, and a benefit for unrealized depreciation of investments for the year ended December 31, 2015. |
| (3) | For the years ended December 31, 2016, 2015 and 2014, respectively, 5,751,815, 5,710,212 and 4,244,128 potentially dilutive common shares were excluded from the weighted-average common shares outstanding for diluted net increase in net assets resulting from operations per common share because the effect of these shares would have been anti-dilutive. |
| GSV CAPITAL CORP. AND SUBSIDIARIES FINANCIAL HIGHLIGHTS |
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| |
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| Three months ended | Three months ended | ||||||||||
| December 31, | December 31, | ||||||||||
| 2016 | 2015 | ||||||||||
| Net asset value at beginning of period | $ | 10.08 | $ | 16.17 | |||||||
| Net investment income/(loss) | 0.17 | (1 | ) | (0.24 | ) | (1 | ) | ||||
| Realized loss | (0.01 | ) | (1 | ) | – | (1 | ) | ||||
| Change in unrealized depreciation | (1.65 | ) | (1 | ) | (0.69 | ) | (1 | ) | |||
| Benefit for taxes on unrealized deprecation of investments | 0.07 | (1 | ) | – | (1 | ) | |||||
| Cash distributions paid | – | (1.36 | ) | ||||||||
| Effect of shares issued including dilution | – | (1.80 | ) | ||||||||
| Net asset value at end of period | $ | 8.66 | $ | 12.08 | |||||||
| Year ended | Year ended | Year ended | Year ended | Year ended | ||||||||||||||||||||||
| December 31, | December 31, | December 31, | December 31, | December 31, | ||||||||||||||||||||||
| 2016 | 2015 | 2014 | 2013 | 2012 | ||||||||||||||||||||||
| Net asset value at beginning of year | $ | 12.08 | $ | 14.80 | $ | 14.91 | $ | 13.07 | $ | 12.95 | ||||||||||||||||
| Issuance of common shares | – | – | – | – | 1.91 | (4 | ) | |||||||||||||||||||
| Underwriters’ discount | – | – | – | – | (0.72 | ) | (2 | ) | ||||||||||||||||||
| Offering costs | – | – | – | – | (0.04 | ) | (2 | ) | ||||||||||||||||||
| Net investment loss | (0.06 | ) | (1 | ) | (2.52 | ) | (1 | ) | (0.66 | ) | (1 | ) | (0.46 | ) | (1 | ) | (0.51 | ) | (1 | ) | ||||||
| Realized gain (loss) | (0.12 | ) | (1 | ) | 2.80 | (1 | ) | 1.24 | (1 | ) | (1.12 | ) | (1 | ) | (0.09 | ) | (1 | ) | ||||||||
| (Provision)/Benefit for taxes on net realized capital gains/losses | – | (1 | ) | 0.02 | (1 | ) | (0.51 | ) | (1 | ) | 0.49 | (1 | ) | – | ||||||||||||
| Change in unrealized appreciation (depreciation) | (3.30 | ) | (1 | ) | (0.69 | ) | (1 | ) | (0.30 | ) | (1 | ) | 4.53 | (1 | ) | (0.43 | ) | (5 | ) | |||||||
| (Provision)/Benefit for taxes on unrealized appreciation/deprecation of investments | 0.10 | (1 | ) | 0.83 | (1 | ) | 0.12 | (1 | ) | (1.60 | ) | (1 | ) | – | ||||||||||||
| Distributions from realized gain | (0.04 | ) | (2.76 | ) | – | – | – | |||||||||||||||||||
| Dilution from shares issued | – | (0.40 | ) | – | – | – | ||||||||||||||||||||
| Net asset value at end of year | $ | 8.66 | $ | 12.08 | $ | 14.80 | $ | 14.91 | $ | 13.07 | ||||||||||||||||
| Per share market value at end of year | $ | 5.03 | $ | 9.37 | $ | 8.63 | 12.09 | 8.43 | ||||||||||||||||||
| Total return based on market value | (23.29 | ) | %(3) | 8.57 | %(3) | (28.62 | ) | %(3) | 43.42 | %(3) | (39.57 | ) | %(6) | |||||||||||||
| Total return based on net asset value | (27.74 | ) | %(3) | (0.27 | ) | %(3) | (0.74 | ) | %(3) | 14.08 | %(3) | 0.93 | %(6) | |||||||||||||
| Shares outstanding at end of year | 22,181,003 | 22,181,003 | 19,320,100 | 19,320,100 | 19,320,100 | |||||||||||||||||||||
| . | . | |||||||||||||||||||||||||
| Ratios / Supplemental Data: | ||||||||||||||||||||||||||
| Net assets at end of year | $ | 192,128,810 | $ | 268,010,945 | $ | 285,903,673 | 287,966,444 | 252,582,801 | ||||||||||||||||||
| Average net assets | $ | 243,577,514 | $ | 296,560,393 | $ | 284,953,811 | 250,121,052 | 208,050,344 | ||||||||||||||||||
| Ratios | ||||||||||||||||||||||||||
| Ratio of gross operating expenses to average net assets | 0.82 | % | 9.10 | % | 7.64 | % | 8.83 | % | 4.10 | % | ||||||||||||||||
| Ratio of net income tax provisions to average net assets | (0.87 | ) | % | (1.88 | ) | % | (0.50 | ) | % | (3.33 | ) | % | – | % | ||||||||||||
| Ratio of net operating expenses to average net assets | (0.05 | ) | % | 7.22 | % | 7.14 | % | 5.50 | % | 4.10 | % | |||||||||||||||
| Ratio of net investment loss to average net assets | (0.52 | ) | % | (16.41 | ) | % | (4.48 | ) | % | (3.55 | ) | % | (3.98 | ) | % | |||||||||||
| Portfolio Turnover Ratio | 4.46 | % | 8.30 | % | 19.45 | % | 2.96 | % | 13.26 | % | ||||||||||||||||
| (1 | ) | Based on weighted-average number of shares outstanding for the year. |
| (2 | ) | Based on shares outstanding at end of period. |
| (3 | ) | Total return based on market value is based on the change in market price per share between the opening and ending market values per share in the year. The closing market price per share adjusted for dividends on December 31, 2015 is $6.61. Total return based on net asset value is based upon the change in net asset value per share between the opening and ending net asset values per share. |
| (4 | ) | Issuance of common shares for the year ended December 31, 2012 is based on the change in net asset value from the secondary offerings on February 10, 2012 and May 11, 2012. |
| (5 | ) | Includes the impact of the different share amounts as a result of calculating certain per share data based on the weighted average basic shares outstanding during the period and certain per share data based on the shares outstanding as of a period end or transaction date. |
| (6 | ) | Total return based on market value is based on the change in market price per share between the opening and ending market values per share in the period. Total return based on net asset value is based upon the change in net asset value per share between the opening and ending net asset values per share and the issuance of common shares in the period. The percentage returns noted above are based on the increase in our net asset value attributable to issuances of our common stock at a premium to our net asset value per share, rather than investment returns. Such issuances of our common stock at a premium to net asset value per share are not typical, and may not occur in the future. The total returns are not annualized. |
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